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AUD/USD lower ahead of RBA minutesThe Australian dollar has posted losses on Monday. Early in the North American session, AUD/USD is trading at 0.6227, down 0.31% at the time of writing. It's a very light calendar week, with the Christmas holiday just around the corner. The Reserve Bank of Australia releases the minutes of this month's meeting on Tuesday, which is the sole Australian event this week. At the December meeting, the RBA held the cash rate at 4.35% for the ninth straight time. Still, the rate statement held out hope for a near-term rate cut, based on some nuances in the language. Previous statements had signaled that rate hikes were on the table, with the board stating it was not "ruling anything in or out", but this phrase was omitted in the December statement. The RBA also sounded more optimistic about the inflation outlook, with the statement noting that the board was "gaining confidence that inflation is moving sustainably towards target". The market viewed this language as being dovish, although Governor Bullock reiterated after the meeting that the February rate decision would be based on the data. In the US, durable goods orders declined 1.1% m/m in November, after an upwardly revised 0.8% gain in October and well below the market estimate of -0.4%. The decline was largely driven by a decrease in new orders for transportation equipment. The Conference Board Consumer Confidence index fell sharply in December to 104.7, down from an upwardly revised 112.8 and well off the market estimate of 113. Consumers were less optimistic about the employment outlook and incomes. The Conference Board report found that consumers are concerned that the tariffs proposed by the incoming Trump administration will push prices higher in 2025. AUD/USD pushed below support at 0.6247 and tested support at 0.6219 earlier 0.6278 and 0.6306 are the next resistance lines
by OANDA
RBA's Bullock says no rate cuts coming, Aussie soarsThe Australian dollar has started the week with slight gains. AUD/USD is trading at 0.6685 in the European session, up 0.24% on the day at the time of writing. Earlier today, the Australian dollar rose as high as 0.6694, marking a one-month high. Hawkish remarks from Reserve Bank of Australia’s Governor Bullock sent the Aussie flying on Friday. Bullock reiterated that there would be no interest rate cuts in the “near term”. Bullock used the same language after the meeting on August 6 and when she clarified that this meant a period of at least six months, the Australian dollar responded with strong gains. The RBA statement at the meeting expressed the Bank’s frustration that inflation remains too high and is coming down slower than the central bank had expected. Will we gain any insights from Tuesday’s RBA minutes release? The minutes will indicate that the Board discussed the possibility of a rate hike, but that isn’t really news since the Board did the same thing at the previous two meetings. If the minutes show that the RBA has little appetite for a rate cut, that could send the Australian dollar lower as the markets are at odds with Bullock’s hawkish message. The markets have fully priced in a rate cut of 25 basis points in November and expect further cuts early in 2025. The rate statement noted that inflation remained too high and was coming down slower than expected. China will announce its loan prime rates (LPR) on early Tuesday. A month ago, China’s central bank surprised the markets and lowered the rates for the one-year and five-year LPRs for the first time in close to a year. The central bank is expected to maintain the one-year LPR at 3.35% and the five-year loan rate at 3.85%. AUD/USD is testing resistance at 0.6691. Close by, there is resistance at 0.6713 0.6650 and 0.6628 are the next support levels
by OANDA
AUD/USD eyes confidence reportsThe Australian dollar has pushed higher on Monday. In the North American session, AUD/USD is trading at 0.6600, up 0.35%. Australia’s Westpac consumer confidence is expected to rebound in April after a 1.8% decline in March. The market estimate stands at 0.5%. We’ll also get a look at the mood of the business sector, with NAB business confidence expected to fall to -3 in March, down from 0 in February. Consumers and businesses are in a surly mood about the economy and last month’s pause from the Reserve Bank of Australia increased skepticism about a rate cut. The RBA has maintained the cash rate three straight times and hasn’t signaled when it will end its “higher for lower stance”. The March RBA minutes didn’t mention the possibility of a rate hike, the first time that’s happened in the current tightening cycle, but the hot US nonfarm payrolls release may have pushed back the timing of an RBA cut. A rate cut from the RBA would have more impact if the Federal Reserve lowered rates first but the nonfarm payrolls data has pushed the likely timing of a first rate cut in the US from July to September. US nonfarm payrolls jumped to 303,000 in March, up from a revised 270,000 in February and blowing past the market estimate of 200,000. The unemployment rate dipped lower to 3.8%, down from 3.9% and below the market estimate of 3.9%. Wage growth matched expectations at 4.1%, down from 4.3%. The strong release points to a robust labour market, and investors have doubts if the Fed will cut more than twice this year. This mark a huge turnaround in market expectations – in January, an exuberant market had priced in six rate cuts in 2024, but the US economy is performing much better than expected despite high interest rates. AUD/USD tested resistance at 0.6606 earlier. Above, there is resistance at 0.6632 0.6577 and 0.6551 are providing support
by OANDA
Australian dollar eyes RBA minutesThe Australian dollar has started the trading week with considerable losses. In the North American session, AUD/USD is trading at 0.6482, down 0.50%. Investors are eagerly awaiting the minutes from the Reserve Bank of Australia’s meeting last month. At the meeting, the central bank maintained the cash rate at 4.35% for a third straight time. The pause was expected and what was of more interest was the slight change in language in the rate statement. The February statement said that “a further increase in interest rates cannot be ruled out” and this was changed to the “Board is not ruling anything in or out” at the March meeting. The markets jumped on the change in language, viewing it as a signal that the RBA had removed its hiking bias. This sent the Australian dollar sharply lower in the aftermath of the meeting, although it fully recovered by the next day. The RBA statement said that “encouraging signs that inflation is moderating”, but the RBA remains concerned that inflation still remains high and is worried about the uncertain economic outlook, both domestically and abroad. Household consumption remains weak and growth has slowed and China’s economy remains a major concern. Will the minutes indicate that the RBA is becoming more dovish about its rate path? If so, we could see the Australian dollar again lose ground on expectations that the central bank is moving closer to a rate cut. The RBA hasn’t yet laid to rest the possibility of another rate hike, although that seems an unlikely scenario barring an unexpected resurgence in inflation. The rate-tightening cycle is likely over and done with and the markets will be looking for some clues about a possible rate cut in the RBA minutes. AUD/USD Technical AUD/USD tested resistance at 0.6519 earlier. Above, there is resistance at 0.6554 There is support at 0.6480 and 0.6445
by OANDA
AUD/USD extends losses, RBA minutes next, Lowe is outThe Australian dollar has started the week in negative territory. In the European session, AUD/USD is trading at 0.6816, down 0.32%. The Aussie is coming off a banner week, with gains of 2.18% against the US dollar. The Reserve Bank of Australia releases the minutes of the July 4th meeting on Tuesday. At that meeting, the RBA took a pause and maintained the cash rate at 4.10%. The burning question is whether interest rate levels have peaked. The markets are more confident that the RBA is leaning towards another pause in August, with a 75% probability of a 25-bp hike in August, compared to 48% just a week ago. The RBA has based its rate decisions on key economic data, in particular, inflation and employment reports. Thursday's employment report will be a key factor in the RBA rate decision. If the employment numbers are stronger than expected, we'll likely see the markets revise higher the probability of a rate hike in August. There was a feeling in the air that RBA Governor Lowe would be shown the front door, and the axe came down on Friday. Lowe has been heavily criticised for assurances he made as late as November 2021 that he would not raise rates until 2024, only to embark on an aggressive rate-hike campaign soon after. The RBA's zig-zagging of rate hikes and pauses hurt the central bank's credibility, and a recent review of the RBA found that major structural changes were needed. Add a 7% inflation level to the mix, and it's not difficult to see why the government decided that a change was needed at the helm of the RBA. There is resistance at 0.6855 and 0.6947 0.6786 and 0.6676 are providing support
by OANDA
Australian dollar extends lossesThe Australian dollar has edged lower today. Earlier, AUD/USD dropped to 0.6654, its lowest level since May 2020. Risk sentiment has soured after Russia announced that it is moving quickly to annex territories that it has captured in Ukraine. European leaders quickly denounced the move as a "sham". An annexation would seriously escalate the conflict in Ukraine, as Russia could argue that any fighting in the annexed territory was an attack on sovereign Russian land. President Putin also ordered the mobilization of 300,000 reservists, an indication of how badly the campaign is going for Moscow. All eyes are on the Federal Reserve which wraps up its policy meeting later today. The Fed is expected to hike by 0.75%, which would bring the benchmark rate to 3.25%. This move would be significant as rates would move above the neutral rate level of 2.5%, into restrictive territory. There is an outside chance that the Fed will raise rates by a full point, which would unnerve the markets and likely send the US dollar sharply higher. Aside from the rate hike, investors will be keenly monitoring the Fed's latest quarterly forecasts for the economy. This will include projections for unemployment and interest rate levels. The Fed is expected to remain hawkish and argue that the price of higher unemployment and a further rise in rates is the painful but necessary price to rein in inflation. The RBA minutes of the September meeting didn't contain any surprises. The minutes reiterated the message that further rate hikes are coming, but the size of the hikes will be data-dependent. At the meeting, members argued over whether to raise rates by 25bp or 50bp - in the end, the Bank went for the latter option, bringing the cash rate to 2.35%. With no inflation or employment data prior to the October meeting, RBA members may again be split over how much to tighten. This should make for an interesting meeting that could trigger volatility from the Australian dollar. AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869
by OANDA
Aussie eyes RBA minutesIt was a roller-coaster week for the Australian dollar, with much of the volatility driven by central bank rate moves. AUD/USD ended the week with a huge decline of 1.62% but has started the week in positive territory. Last week's releases indicate that the labour market remains robust and that inflation expectations are accelerating. Australia's employment report for May, released on Thursday, indicated that the labor market remains strong. The economy created 60.6 thousand jobs, crushing the estimate of 25.0 thousand (4.0 thousand prior). The unemployment rate remained unchanged at 3.9%. On the inflation front, inflation expectations rose sharply to 6.7% in June, up from 5.0% in May. Will RBA reveal its hand in the minutes? The RBA is undoubtedly carefully monitoring employment and inflation data, and both of these releases lend support for the central bank to continue raising rates - the employment market is strong enough to handle tighter policy, while the spectre of unanchored inflation expectations is a red flag that the RBA cannot ignore. Policy makers are willing to take the risk that higher rates could tip the economy into recession if that is the price to pay for lower inflation, which is seen as a huge danger to the economy. The RBA will be in the spotlight on Tuesday, with the release of the minutes from the meeting earlier in June. At that meeting, the RBA shocked the markets with a rate increase of 0.50%, bringing the cash rate to 0.85%. Most analysts had expected a 0.25% hike. Even with the super-size hike, the RBA has some catching up to do, with a cash rate still below 1.0%. The markets will be hoped to glean some insights from the minutes as to the direction of RBA rate policy. Any signals that the RBA plans to hike again by 0.50% should result in gains for the Australian dollar. AUD/USD is testing resistance at 0.6952. Above, there is resistance at 0.7052 There is support at 0.6834 and 0.6734
by OANDA
RBA and May31 Rate DecisionFundamentals: The RBA in December's meeting was a hawkish stance. This suggests that going forward, their monetary policy will continue to be hawkish. Coupled with that, given the pandemic's effects on the Australian economy, the Australian government's fiscal policy will be at the forefront of their minds in stimulating their economy. This is a two for one punch and should have effects on the Australian currency. Conclusions: We have a country that is forced in a corner to take action by their own desire and resolve to prop up their economy. We have a situation where risk has the potential to prevail should the economy is able to recover from the lockdown measures that took place recently. We have a populace that is mobile, able and ready to work should the pandemic situation has improves. This is potentially, good news for the currency. Trades: AUDNZD and AUDUSD
Long
by Rocketman
RBA where are YOU?So far the sudden creep up in the Australian 3 year yield has gone unnoticed. But it has jumped massively in the last two weeks from ​0.07% to 0.26% For months the RBA has kept the rate under 0.10%. However, this time it has left the rate unchecked. According to Michael West, this is the RBA testing the market. The three year rate is the rate that Banks use to lend to home owners and this is about taking the heat out of the property in an election year. www.michaelwest.com.au However, in it's just published minutes (1 June) the bank has confirmed its decision of " a target of around 0.1 per cent for the yield on the 3-year Australian Government bond" So is this a shorting opp? With the rates about to get squashed. Let's see.
TVC:AU03Y
by majicktrader
3
Aussie yawns after RBA minutesThe Australian dollar is having a quiet Tuesday session. Currently, the pair is trading at 0.7744, down 0.14% on the day. The RBA minutes were a non-market mover on Tuesday, as there were no surprises from the central bank. The committee remains focused on employment and wage expectations. The minutes noted the sharp appreciation in the Australian dollar since November 2020, adding that the currency was "lower than it would have been otherwise as a result of the Bank's policies." The committee reiterated that they did not anticipate raising interest rates prior to 2024. This dovish stance is consistent with the Federal Reserve, which has said it does not plan to raise rates prior to 2023. Lowe wants to see inflation move up to the bank's target of between 2% and 3%, and only then raise rates. The federal government does not appear to share the RBA's stance on stimulus, and this divergence could become a concern for investors. The central bank recently extended its QE programme, which is a crucial component of its ultra-dovish monetary policy. However, the federal government wants stimulus to be tapered and let the private sector shoulder more of the recovery. Last week, RBA Governor Lowe acknowledged that low interest rates had fueled the housing boom, but insisted that the bank would not change its policy based on housing market considerations. As for the housing market, the House Price Index jumped 3.0% in the fourth quarter of 2020, up sharply from 0.8% beforehand. This easily beat the forecast of 1.9%. The housing market has been red-hot, and both the RBA and the government will have to keep a close eye on this sector. AUD faces resistance at 0.7832, followed by resistance at 0.7906. On the downside, there is support at 0.7652, with the next support level at 0.7546
by OANDA
Australian dollar dips, RBA minutes nextThe Australian dollar is in negative territory in the Monday session. Currently, the pair is trading at 0.7739, down 0.29% on the day. The RBA releases the minutes of its March meeting early on Tuesday (00:30 GMT). At the meeting, policymakers maintained the Cash Rate at 0.10%, where it has been pegged since November. The RBA statement pledged that the record low rates would stay in place as long as inflation remained below the target level of 2 to 3 per cent. The statement noted that the current monetary policy is "continuing to help the economy by keeping financing costs very low" and is "contributing to a lower exchange rate than otherwise". The RBA has watched with concern as the Australian dollar has appreciated sharply against the US dollar, with the Aussie punching above the symbolic 80-line earlier in March. The RBA prefers an exchange rate below the 80-level, in order to maintain price stability and protect the critical export sector. The RBA has been very clear about future monetary policy. At the March meeting, RBA Governor Lowe said that the cash rate is very likely to remain at its current level until at least 2024.” This dovish stance is consistent with the Federal Reserve, which has said it does not plan to raise rates prior to 2023. Lowe wants to see inflation move up to the bank's target of between 2% and 3%, and only then raise rates. Investors are also keeping an eye on the Federal Reserve, which holds its policy later in the week. The message to the market is expected to be dovish, given that the Fed has said it does not anticipate raising rates before 2023. With the US recovery gaining steam, investors will be particularly interested in the Fed's dot-plot, which is a signal of the Fed's expectations of future interest rate changes. AUD faces resistance at 0.7832, followed by resistance at 0.7906. On the downside, there is support at 0.7652, with the next support level at 0.7498
by OANDA
Reserve Bank of Australia: Meetings in minutes!!!Hello, in this analysis, in some minutes we see that Australia economy is go to the recovery. If you remember in the past weeks, I mentioned that Australian economy is into the recovery and then, we hope that scenario on the strenghten of the Australian Dollar, it's a greatest opportunit to buoy AUD. So guys, in just less of 1 hour the Reserve Bank of Australia is meeting, stay alert, I reccomend to put this 2 long position in the strategy point for long position!!! Good luck!!!
Long
by harisonhbn9718
1
ORBEX GBPUSD, EURUSD, AUDUSD Under Pressure! But For How Long?In today's #marketinsights video recording I analyse #fxmajors #audusd, #gbpusd and #eurusd. They are all under pressure for different reasons: EURUSD - ECB's Lane dovish on ECB's inflation target - Italian CPI weakening GBPUSD - BoJo goes to Brussels empty-handed - Brussels not sure if extension will help AUDUSD - RBA reveals plans to cut more if necessary - Bank could cut twice more in 2019 to support inflation and employment goals Meanwhile, everyone stresses out about #FOMC! Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice
by Orbex
AUSSIE - AUDUSD: RBA MINUTES HIGHLIGHTSRBA minutes broadly neutral on the margin. Aussie rates (30 day bills) are implying a 5% chance of an October 25bps cut. In general we've seen aussie rates firm up, with 30d bills moving from 7% last week and 9% the week before to now 5%, this firming/ steepening has been the general consensus further along the maturity curve where rate cut hopes are diminishing in AUD as speculation regarding a nearing RBA terminal rate/ housing market issues dampening expectations. Feb/ March 2017 is where we see a "dip" in rates or a spike in cut hopes, with there currently being 12/13bps of cuts into these dates - there seems to be an accumulation of institutional macro expectations of an RBA cut in March. Beyond here we see diminishing basis point cuts:time with the May to July differential being only 1bps (from -16bps in May to -17bps in Jun/ July). The driver for AUDUSD will likely be FED/ USD induced. AUD will provide a firm base, but has continued risk of cross selling from AUDNZD as kiwi at 2.00% remains the leading G10 carry trade. Both kiwi and aussie have the ability to push higher and maintain these higher levels if the fed confirms one hike this year, which puts the fed a hike behind the curve. RBA MINUTES: JUDGED CURRENT STANCE OF POLICY CONSISTENT WITH GROWTH, INFLATION TARGETS - Steady Decision Took Into Account Rate Cuts In May And August, Recent Data - Estimated Around Half Of The August Rate Cut Had Been Passed On To Bank Customers - Repeats Rising A$ Would Complicate Economic Rebalancing - Decline In A$ Since 2013 Continued To Support Traded Sector Of Economy - Data Suggest Economy Growing In Line With Potential - Forward Indicators Consistent With Little Change In Unemployment Rate In Coming Months - Cost Pressures, Wage Growth Set To Remain Low For Some Time - Conditions In Established Housing Market Had Generally Eased, House Price Growth Moderated - High Home Building Approvals Pointed To Significant Amount Of Work In Pipeline - Economic Drag From Falling Mining Investment Looked To Have Peaked In 2015/16
by QuantumLogicTrading
AUSSIE - AUDUSD: RBA MINUTES HIGHLIGHTSRBA MINUTES: JUDGED CURRENT STANCE OF POLICY CONSISTENT WITH GROWTH, INFLATION TARGETS - Steady Decision Took Into Account Rate Cuts In May And August, Recent Data - Estimated Around Half Of The August Rate Cut Had Been Passed On To Bank Customers - Repeats Rising A$ Would Complicate Economic Rebalancing - Decline In A$ Since 2013 Continued To Support Traded Sector Of Economy - Data Suggest Economy Growing In Line With Potential - Forward Indicators Consistent With Little Change In Unemployment Rate In Coming Months - Cost Pressures, Wage Growth Set To Remain Low For Some Time - Conditions In Established Housing Market Had Generally Eased, House Price Growth Moderated - High Home Building Approvals Pointed To Significant Amount Of Work In Pipeline - Economic Drag From Falling Mining Investment Looked To Have Peaked In 2015/16
by QuantumLogicTrading
1
AUDUSD: RBA MINUTES - NEUTRAL & NO COMMITMENT TO FURTHER ACTIONMinutes were neutral with little hints to further action, much of which inline with the SOMP - if anything it was on the hawkish side given they expect "inflation to be improved by easing" which infers they think policy stable at 1.50% might be sufficient. Though they did go on to say "AUD$ rise could cause complications" though it was kept to a very limited sense (mining industry) and it certainly didnt suggest further easing was on the horizon if it persists. So Aussie from here, with the continued lack of fwd guidance from the RBA i see higher, as posted several days ago - given the 6-9m trend which looks to be yield seeking given the largest economies have slipped into negative rates (ECB, BOJ) and the BOE soon to follow (plus FOMC seem to have adopted a much flatter hike trajectory) thus i expect this bullish sentiment to continue to put topside pressure on aussie (particularly as the RBA have offered little reason for speculators to stay away) as investors continue to seek carry. Trading Strategy: Bullish - Buy Kiwi and Aussie @Market - careful of US Data. 0.773 and 0.779 (0.73 kiwi) look to be the next targets higher - risks to the view are obviously a firming USD through data improvement (given this is the Feds biggest mandate for future hikes), but given the recent data environment this seems unlikely, where i expect CPI today to miss too given retail sales and PPI (CPI Leading indicators) missed heavily last week - this should cause USD STIRs to sell-off again, push rate hopes for sept/ dec back lower and USD weaker + the presidential election i hear is becoming a somewhat constant drag on the USD, even if the rate expectations sell-off subsides. Kiwi has slightly more fwd guidance from the RBNZ with Oct/ November cut on the cards - whilst this may seem encouraging remember kiwi rates trade at 2.0% still vs 1.5% aussie which is a 50bps differential - not to mention that being 200bps+ vs rest of G10.. so kiwi topside is likely expected even though there was some average further monpol suggested as kiwi rates have to come down quite aggressively until they are even at par with aussie, let alone not the no.1 yield currency or closer to the average in G10.. until this point the antipodes will continue to be chased higher imo as investors seek easier yields . RBA Minutes Highlights: -RBA MINUTES: AT AUGUIST MEETING JUDGED PROSPECTS FOR GROWTH, INFLATION WOULD BE IMPROVED BY EASING -RBA MINUTES: BOARD SAW DIMINISHED RISKS FROM HOUSING DEBT, RISING HOME PRICES -RBA MINUTES: ROOM FOR STRONGER ECONOMIC GROWTH GIVEN INFLATION TO REMAIN LOW FOR SOME TIME -RBA MINUTES: HOUSE PRICES, AUCTION RATES, MORTGAGE LENDING POINTED TO COOLING MARKET -RBA MINUTES: RISING A$ COULD COMPLICATE TRANSITION FROM MINING BOOM -RBA MINUTES: FORWARD INDICATORS OF JOBS GROWTH POINTED TO STEADY UNEMPLOYMENT IN COMING MONTHS -RBA MINUTES: CONSIDERABLE UNCERTAINTY ABOUT MOMENTUM IN LABOUR MARKET, INFLATION OUTLOOK -RBA MINUTES: GDP GROWTH LIKELY TO BE MORE MODEST IN Q2, AFTER STRONG Q1 -RBA MINUTES: UNEMPLOYMENT EXPECTED TO DIP ONLY SLOWLY TO 5.5 PCT BY 2018, LEAVE SLACK IN MARKET -RBA MINUTES: SUPPLY OF NEW HOMES TO KEEP RENT INFLATION AT LOW LEVELS -RBA MINUTES: PIPELINE OF HOME BUILDING AT VERY HIGH LEVELS, RISK OF OVERSUPPLY IN SOME MARKETS -RBA MINUTES: REASONABLE CHANCE OF FURTHER STIMULUS GLOBALLY IMPACTING ON CURRENCIES -RBA MINUTES: CHINA STIMULUS SUPPORTING GROWTH THERE, BUT UNCERTAINTY OVER LONGER-TERM OUTLOOK Full Minutes - www.rba.gov.au a
Long
by QuantumLogicTrading
AUDUSD: RBA SOMP HIGHLIGHTS - NFP GUIDANCE FROM HEREThe RBA was relatively neutral on the margin, keeping their inflation targets the same at 1.5-2.5. However, unfortunately for aussie shorts the RBA didnt offer any forward guidence on sentiment towards further easing, or specific reference to the aussie FX level - despite there being a strong bid bias brewing in the aud$ cross post-25bps cut. Also their forecasts for underlying inflation imo were quite positive at 1.5% vs 1.0% currently - this infers the RBA perhaps even thinks that the 1.5% rate will be sufficient to reach their inflation target, and that another cut this year isnt being thought about given they predict on target inflation with current policy. Although this does then run the downside risk of inflation staying low (as i expect) which may force the RBAs hand to cut again at years end if inflation is below 1.% or another print that misses the 1.5% expected mark. At these levels aussie looks attractive on the offer with a 0.74xx target - however USD supply has been strife since last week when rate expectations sold off amid poor GDP print to just p12% in september - down from 25% earlier in the week.. this week failed to improve, with little impetus for this to be the case, though the greenback now looks to NFP today for guidance. A beat/ firm print should help aussie offer well at these levels given we are right at the double top 0.766 level, so any USD strength arising from the NFP print has a bias to see AUD$ move lower, though as the macro landscape questionably is changing, it is uncertain if it will be enough to surpress yield seekers demand for aussie deposits for long/ a sustained period (if at all), which is expecially odd since we saw the rate brought down this week whihc should have set a bearish tone for the week, as we have seen with the BOE and GBP. After NFP we will have a clearer view. From here i think aussie positioning should be sidelined until the NFP print is clear - a miss and i actually think Aussie is better to trade bid, with 0.78 a firm target. A NFP hit and that should offer aussie lower, though for some reason I see the risk asymmetrically skewed to aussie topside, given the very week reaction to what is/ should be the biggest fundamental driver possible - a rate cut. So much of this trade is being vigilant - an NFP miss, buy a 0.766 confirmed breakout, a NFP hit - ensure AUD$ is trading with a clear bid bias.. any 10-30pips movement lower will not suffice at these levels, aussie is still likely bidding. RBA Minutes Highlights: - Underlying Inflation To Remain Under 2% For Much Of Forecast Period, Reach 2 % By End 2018 - Prospects For Economy Positive, But Low Inflation Allows For "Even Stronger Growth" - Judged Risks Associated With Rising House Prices And Debt Had Diminished - A$ Remains Significant Source Of Uncertainty For Inflation, Growth Forecasts - Economic Growth And Inflation Forecasts Little Changed Overall - Forecasts Underlying Inflation 1.5% By End 2016, 1.5-2.5% End 2017, 1.5-2.5% End 2018 - Forecasts GDP Growth 2.5-3.5% End 2016, 2.5-3.5% End 2017, 3-4% End 2018 - Says Unemployment To Fall Only A Little Out To 2018, Employment Growth To Be Modest This Year - Drag On GDP From Falling Mining Investment Looks To Have Peaked, Non-Mining Still Subdued - Dwelling Investment To Stay Strong For Next Year Or So, But Raises Risk Of Oversupply - GDP Growth Looks To Have Moderated In Q2 As Net Exports Added Less - Wage Growth Expected To Remain Low, Rise Modestly Out To 2018 - Increasing Supply, China Steel Cutbacks To Put Downward Pressure On Iron Ore Prices - Growth In China Expected To Slow Gradually Over Next Few Years, Housing A Risk - Brexit To Have Limited Effect On Australia's Major Trading Partners
by QuantumLogicTrading
11
SHORT AUDUSD: EYEING CPI PRINT - SELL 1.0%YOY, 0.3%Q; RBA EASINGAM 2:30GMT Ausssie Inflation prints are released these are key for determining their August Policy Decision 1. IMO a 1.0%yoy CPI print shows a further 0.3% contraction in their yearly CPI, this should be sufficient to push the RBA to cutting their OCR by 25bps, similarly a 0.3%qoq CPI will be needed in conjunction to show that inflation is growing at a slow pace. 2. RBA Minutes that support this view of low CPI leading to a cut from July said - - On the margin RBA remained in line with previous meetings, adding little but still keeping it on the dovish side imo. Once again, as in previous minutes (and from several other central banks) RBA continued to communicate the necessity of "watching key data" to drive future policy decisions. Interestingly though, they also mentioned the negative impact of a strong AUD which in turn supports RBA doves out there as a cut is the remedy to stop a deflationairy currency in its tracks. Further, RBA notably were under no illusions regarding their inflation situation stating " inflation set to stay low for some time" - another encouraging stimulus for doves given inflation's important position/ weight for setting future policy. - As per the attached post, i remain dovish/ bearsh on aussie$, and i continue to expect a cut to 1.50% (25bps) this year given i expect their inflation to remain stagnant. Clear targets are 0.73 when probability of a cut is higher - though i would enter shorts regardless if AUD$ could find its way to its 12m highs at 0.78, though unlikely. - I like USD strength in the medium term too hence supporting the short Aussie dollar view RBA Minutes Highlights: RBA MINUTES: BOARD TO WATCH KEY DATA, WILL MAKE ADJUSTMENT TO RATES IF NEEDED; REVIEW OF FORECASTS IN AUG WILL HELP STEER POLICY - Inflation set to stay low for some time, employment mixed, retail sales look set to pick up - Stronger AUD would complicate economic rebalancing - Economic transition is now well advanced
Short
by QuantumLogicTrading